The balance beam for business

If you are a parent, you will know the value of letting your kids play on a balance beam – it builds balance, stability, body awareness and coordination. These are some of the most crucial gross motor skills a child can learn.

In business similar “gross motor skills” are critical to an organisation’s success – stability, organisational awareness and collaboration.

Stability, or predictability, of revenue, of employees tenure, of quality of outcomes, and in the end value delivered to customers. These elements go a long way to creating quality business.

Organisational awareness of cultural strengths and deficiencies are essential for day to day management but also when driving change through an organisation. Today business live and die by their culture, and being aware of their culture is critical.

Collaboration between employees, teams and divisions in organisations is critical so that they are all working towards the same business outcome. In fact, as many organisations have moved more and more to being knowledge-based collaboration (and the lack of it) happens even when we don’t notice it.

So how can we deliver these key “skills” to an organisation?

Given I’m exploring the value of Kanban in organisations today’s answer is Kanban. There are many other ways of delivering these organisational skills but let’s explore Kanban.

When a Kanban system is humming along it will be performing like a well-tuned F1 car, you won’t even notice how the system is delivering balance to the team.

There are many ways that Kanban creates balance:

  • Work In Progress Limits
  • Pull vs Push
  • Capacity Management
  • Explicit Policies
  • Feedback Loops
  • Known Customer Lead Time

The essential item in the list above is Work In Progress limits (WIP limits).

WIP limits define how much work, aka cards, can be in a specific column/stage of a Kanban board. When the stage meets a WIP limit no more work can be pulled into the column. The team then works how to get work out of the stage to allow for new work to flow into the stage.

Often work can’t “move out” to the next stage on the board due to a “blocker” in the next stage. Figuring out how to solve this “blocker” is key to the evolutionary, self-directed, continuous improvement a team implements to improve their processes, the quality of outcomes and lead time of value delivered to the customer.

How does this work? Well, WIP limits use a little theory called the Theory of Constraints that we borrow from Lean Manufacturing – well the whole idea of kanban is borrowed from Lean Manufacturing.

“Theory of Constraints is a methodology for identifying the most important limiting factor (i.e. constraint) that stands in the way of achieving a goal and then systematically improving that constraint until it is no longer the limiting factor.”

Lean Production https://www.leanproduction.com/theory-of-constraints.html

Implementing WIP limits can seem counter-intuitive at first. Often when talking to teams who are newly implementing Kanban they say “Won’t that just slow down delivery to the customer?” The answer is “No” as its that tension brought to bear by The Theory of Constraints that actually results in faster delivery to the customer at a higher quality.

There is a five step process for eliminating constraints within a system:

  1. Identify the constraint
  2. Exploit the constraint
  3. Subordinate everything else to the exploitation of the constraint
  4. Elevate the constraint
  5. Repeat

This process isn’t easy and will create tension in a team. But this improvement process makes the team work together to solve the problem. The solving of the problem requires critical thinking as we don’t want to solve problem A only to create a larger problem B.

Yes sometimes one can only solve a constraint through more investment, but 9 times out of 10 there’s always improvements to be made before you get to the “more investment” stage.

The other key part of Kanban that creates balance is the built-in capacity management through WIP Limits and Pull vs Push. WIP Limits and the fact work is “pulled” into the system mean that the system manages the capacity of the team, creating a more sustainable service orientated and future proof environment.

Kanban, when implemented “correctly” and “completely” helps an organisation grow their capacity predictable outcomes, with a positive culture all the while driving up collaboration.

There is lots more detail I could go into around how Kanban creates balance – a lot has to do with concepts like Little’s law, Weighted Shortest Job First and Probabilistic forecasting but for now, I’ll let you go about your day.

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